Phoenix to phase out food tax….maybe

If you’ve followed the ever evolving saga of the city’s emergency food tax, I suspect that like me you’re nursing a painful case of whiplash.

From the mayor’s pre-election pledge to get rid of the tax to the mayor’s post-election pledge to break his pre-election pledge.

From the city manager’s sky is falling no-food-tax forecast in March to his assurances last week that he could cut the tax in half by January, no sweat.

From plans by a bare majority of the council to vote last week to halve the tax in January to last Wednesday’s actual 8-1 vote, to put off a decision until October.

Giving the city’s employee groups five months to pick off one vote in order to keep the tax intact and the revenues flowing forth — at least until 2015, when the emergency five-year tax will expire…

Presumably.

The 2 percent food tax – hastily enacted in 2010 as the city faced financial freefall — vaulted into public view this spring as the time approached for fulfillment of Mayor Greg Stanton’s campaign pledge to repeal the tax by April 2013. Because the council was deadlocked 4-4, all eyes were on Stanton who did as many suspected all along.

He changed his mind. Citing the no-food-tax budget put together by City Manager David Cavazos – the one that required laying off 100 police officers, closing recreation centers and slashing library hours – Stanton said in March that good leadership required him to support the continued collection of the most regressive tax around.

Imagine Stanton’s surprise in April, when one of the food tax supporters, Councilman Michael Nowakowski, called for a phase-out of the tax. Nowakowski told me he’d been assured by Cavazos that the tax could be cut in half in January without cutting public safety or city services.

He and Councilwoman Thelda Williams called for a May 1 vote.

By last week, however, the plan to vote on the tax cut had softened to a vote to take up the issue on Oct. 1, giving Cavazos until then to factor in the $12 million loss of food-tax funds from next year’s budget.

Understandably, city employee groups oppose the move. Though most employees continued to get annual raises or “longevity” bonuses through the recession, only half of their agreed-upon 3.2 percent cut to pay and benefits has been restored.

Meanwhile, the insatiable piranha that is the public pension program eats up every dime the food tax brings in – and more. Much more.

So it was no surprise when union reps stood before the council last week and branded the tax cut “irresponsible.” I imagine they’ll be busy over the next few months, trying to pull Nowakowski back into the fold.

I’ve long suspected that the end game is to preserve at least half of the food tax to fund future raises and pension costs. As Stanton likes to point out, 22 of the Valley’s 25 cities have a permanent food tax.

But that’s a story for another day.

As we wait for October, there are questions to ponder…

… Like why Cavazos – who rated got a 33 percent pay raise last fall – didn’t propose a phase-out plan himself rather than defaulting in March to the usual police-officers-will-be-fired-if-you-touch-the-tax stance? Why now, after mayor reneged on his campaign pledge, is it doable to start ramping down the tax? Did the sudden appearance of an unexpected fifth council vote change the budget numbers?

And why was Stanton so quick to throw in with Cavazos’ sky-is-falling budget without first considering other options? Why is it that a mayor who opposed the tax (before he supported it) left it to a councilman who supported the tax to plow solid middle ground?

And finally, will Nowakowski, the new swing vote, be able to withstand the inevitable pressure over the next few months to resist pulling a Stanton and changing his mind?

Honestly, the player to watch will be the city manager, who says that he can cut the tax in half in January without affecting services or the city’s AAA bond rating.

“I believe it’s achievable but it does require a second vote in October,” Cavazos told the council last week. “But the basic direction is that this tax is going away.”

So he says in May.

The question is, what will he say in October?

(Column published May 8, 2013, The Arizona Republic.)

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